South Africa's growth forecasts likely to be increased: finance minister

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FILE PHOTO: Nhlanhla Nene is sworn in as Minister of Finance in Cape Town, South Africa, February 27, 2018. REUTERS/Sumaya Hisham

PRETORIA (Reuters) - South Africa’s economic growth forecasts will likely be revised upwards by the time the medium-term budget outlook is announced in October as the government finalizes reforms to boost growth, Minister of Finance Nhlanhla Nene said on Monday.

The economy of Africa’s most industrialized country has struggled to grow in recent years, weighed down by low business and consumer confidence amid political and policy uncertainty.

The Treasury said in February that GDP growth is expected at 1.5 percent this year, up from an estimated one percent last year, helped by a recovery in agriculture and improved investor sentiment.

“We do not want to be overly optimistic about these numbers. At the moment they are penciled in, but we are likely to revise these numbers upwards come the medium term budget in October,” Nene told a union meeting in Pretoria.

Nene said the 2018/19 budget delivered by his predecessor Malusi Gigaba in February would help to support faster economic growth by finalizing many reforms.

He added that a rise in business confidence since President Cyril Ramaphosa succeeded scandal-plagued Jacob Zuma last month has already reduced the strain of debt service costs.

Ratings agency have warned slow economic growth and poor finances of state-owned firms such as power utility Eskom were a risk to the sovereign’s credit ratings.

Reporting by Mfuneko Toyana Writing by Olivia Kumwenda-Mtambo; Editing by James Macharia